Insurance development and the finance-growth nexus: Evidence from 34 OECD countries

Rudra P. Pradhan, Mak Arvin and Neville R. Norman

Journal of Multinational Financial Management, 2015, vol. 31, issue C, 1-22

Abstract: This paper examines causal relationships between insurance market development, financial development, and economic growth in 34 OECD countries for the period 1988–2012. Insurance market development is defined in terms of life, non-life, and total insurance pervasiveness, both by density and penetration. Financial development is a composite index constructed from eight financial development indicators relating to banking and stock markets. We use a panel vector auto-regression model to reveal the nature of Granger causality among the variables. Our results reveal that insurance market development specifically and financial market development overall seem both to be long-run causative factors of economic growth. On the other hand, our short-run causality results show a diverse pattern of short-run adjustment dynamics between the variables, including the possibility of feedback between them in several instances.

Keywords: Insurance market development; Financial development; Economic growth; OECD countries (search for similar items in EconPapers)
JEL-codes: G10 G20 O16 O2 O20 O53 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (30)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1042444X15000092
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:mulfin:v:31:y:2015:i:c:p:1-22

DOI: 10.1016/j.mulfin.2015.02.001

Access Statistics for this article

Journal of Multinational Financial Management is currently edited by I. Mathur and G. G. Booth

More articles in Journal of Multinational Financial Management from Elsevier
Bibliographic data for series maintained by Catherine Liu ().